Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) increased 4.3% in February from January, which was the largest increase for the full month of February since 2009’s 4.4% rise.
The Manheim Used Vehicle Value Index (MUVVI) rose to 234.5, down 7% from a year ago, according to figures released March 7. February’s increase was driven partially by the seasonal adjustment. The non-adjusted price change in February was an increase of 3.7% compared to January, moving the unadjusted average price down 5.6% year over year.
In February, Manheim Market Report (MMR) values saw increases that were not typical, culminating in a 2.4% increase in the Three-Year-Old Index over the last four weeks. During February, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 100.1%, meaning market prices were very close to MMR values. The average daily sales conversion rate increased to 64.3% and was above normal for the time of year. For example, the daily sales conversion rate averaged 55.3% in January 2019. The higher conversion rate indicated that the month saw sellers with more pricing power than what is typically seen for this time of year.
All eight major market segments continued to see seasonally adjusted prices that were lower year over year in February. Pickups had the smallest decline at 3.9%, with compact cars, midsize cars, and vans losing less than the overall industry year over year. Luxury cars, SUVs, and sports cars lost 10.1%, 8.6%, and 7.4% respectively, compared to last February. All eight major segments saw big price increases compared to January, with gains of between 3.3% and 5.9%.
Used Retail Vehicle Sales Declined in February
Leveraging a same-store set of dealerships selected to represent the country from Dealertrack, used retail sales declined 5% in February from January and were down 9% year over year.
Using estimates of used retail days’ supply based on vAuto data, an initial analysis indicates February ended near 41 days’ supply, down from 48 days at the end of January and 13 days lower than how February 2022 ended at 54 days. Leveraging Manheim sales and inventory data, wholesale supply is estimated to have finished February at 24 days, down two days from the end of January and down five days from how February 2022 ended at 29 days.
February’s total new-light-vehicle sales were up 8.7% year over year, with the same number of selling days as February 2022. By volume, February new-vehicle sales were up 9.1% from January. The February sales pace, or seasonally adjusted annual rate (SAAR), came in at 14.9 million, an 8.5% increase from last year’s 13.7 million but down 6.2% from January’s revised 15.9 million pace.
Combined sales into large rental, commercial, and government fleets increased 48% year over year in February. Sales into rental fleets were up 77% year over year, sales into commercial fleets were up 23%, and sales into government fleets were up 42%. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be up 4.3%, leading to an estimated retail SAAR of 12.3 million, up 0.5 million from last year’s pace but down 0.9 million from last month’s pace. The fleet market share of 17.7% was a 3.5% gain compared to last year’s share of 14.2% and was a 1.2% increase from last month’s estimated 16.5% market share.
Rental Risk Prices and Mileage Rise Substantially in February
The average price for rental risk units sold at auction in February was up 0.5% year over year. Rental risk prices were up 5% compared to January. Average mileage for rental risk units in February (at 60,700 miles) was up 2.4% compared to a year ago and up 8.8% from January.
Measures of Consumer Confidence Mixed in February
The Conference Board Consumer Confidence Index declined 2.9% in February, as views of present situation improved but future expectations fell by 8.3%. Plans to purchase a vehicle in the next six months fell to the lowest level since November 2021. The confidence index did not decline as much during the pandemic as the sentiment index from the University of Michigan, but that series has improved every month this year. The Michigan index increased 3.2% in February and was up 6.7% year over year. Consumers’ views of buying conditions for vehicles declined modestly in February but remained much better than a year ago. The daily index of consumer sentiment from Morning Consult measured improving sentiment in February following a slight decline in January. That index increased 3.2% in February as the price of gasoline declined. The national average price for unleaded gas fell 4.1% in February to $3.36 per gallon on Feb. 28, down 7% year over year, according to AAA.